Things that need to take notes to prevent the E-Auction fraud for customer

The increasing popularity of the Internet as a medium of commerce has generated an increase in Internet fraud, raising new and challenging legal issues in areas including online auctions. The high numbers of complaints about online auction fraud had highlighted the absence of any meaningful consumer protection for online auction participants.

So, what can you do to protect yourself, short of simply staying away from the online auctions? Now, let’s me briefly explain about things that consumer should aware in order to prevent E-auction fraud:

1. User identity verification— to verify the personal identification information of their users.
   Identity verification is a trust inducing process that enables trading partners to establish a proof of identity. Utilization of identity verification systems minimizes the risk of using fake contact information or addresses, which reduces the risk of fraud.
   
2. Authentication service—determines whether an item is genuine and described appropriately.
   Online auction participants can elect to have some offered items authenticated. The seller nominally pays for the authentication, but the payment is typically reflected in an increase in the winning bid, due to the additional security. For example: eBay is currently using Verisign, one of the leading providers of digital trust services, to provide verification services for buyers and sellers using their Consumer Authentication Service (CAS).
   
3. Grading services—Determines the condition of an item.
   The existence and quality of item that merchandise offered for sale should be represented to or evaluated by the buyer as a condition of being offered for sale on the auction site.
   
4. Feedback forum—provides users with ability to comment on their experiences with other individuals.
   Online auction participants can elect to educate themselves about their auction counterparts, with varying degrees of reliability, by accessing the online auction sites' feedback forums. The online auction sites solicit feedback from their users, in the hopes of turning their customers into the equivalent of their police force.
   
5. Insurance policy— purchase insurance for certain auction transactions
   It isn't available everywhere, but it covers you in the event of a fraudulent purchase.The online auction sites should offer insurance themselves, covering the full value of transactions, at some reasonable price. For example:eBay offers insurance underwritten by Lloyd’s of London at no cost to eBay users.
   Auctionwatch.com has tips and tricks for using online auction insurance.
   
6. Escrow services—Rely on trusted third parties that hold the money. (payment services)
   The function of online escrow services is a very similar system to the documentary letter of credit, and protects the interests of both buyer and seller against fraud and the risk of non-performance on one side or the other. Online escrow is often used in high value transactions.For example: eBay, recommends using escrow guarantees provided by Escrow.com for merchandise of $500 or more.
7. Fraud Protection Programmes— programmes aimed at preventing fraud.
   Examples of Fraud Protection Programmes are:
   · (i) fraud detection software programmes that scan databases and screens users for certain patterns of fraud thus enabling online auction sites to monitor or check suspected buyers or sellers to prevent fraud;
   · (ii) partial reimbursement for losses resulting from non-delivery or misrepresentation; and
   · (iii) protecting sellers against fraudulent chargebacks and unwarranted claims of non-delivery or misrepresentation
8. Appraisal services—use a variety of methods to appraise it
• Assessment of authenticity and condition
• Review of what comparable items have sold for in recent months.

Consumers can report suspected telemarketing and Internet scams to the NFIC/IFW by calling 800-876-7060 or going to www.fraud.org.The Web site also offers updated tips on telemarketing and Internet fraud. For more information about National Fraud Awareness Week, go to http://www.fraudweek.com/.